Paris Saint-Germain's increasingly desperate search for a new manager endured yet another setback on Wednesday after Fabio Capello, the latest candidate to whom the French champions have turned, rejected the chance to move to Parc des Princes and indicated he intends instead to remain as head coach of Russia.

Capello's son, the lawyer Pierfilippo Capello who acts as his agent, spent the morning in talks with the PSG president, Nasser al Khelaifi, and the sporting director, Leonardo, after flying to Paris apparently to finalise a move after Tottenham Hotspur's André Villas-Boas decided against leaving Spurs.

PSG had already agreed to pay the £2.6m release fee in the 67-year-old former England manager's contract, having previously been just as willing to meet the £10m clause in Villas-Boas's deal at White Hart Lane.

However, the Paris talks ran aground over the length of the contract on offer – a year, with an option for a further 12 months – and Russia's apparent insistence that he see out a notice period. Pierfilippo Capello departed Parc des Princes at around 2pm with no agreement reached, and with his father preparing to depart for Brazil to watch the rest of the Confederations Cup.

There remains the outside possibility that talks could be revived and compromise reached but, for the moment, PSG are resigned to finding yet another alternative. With Roberto Mancini apparently not under consideration, the likes of Michael Laudrup at Swansea, Marco van Basten, Frank Rijkaard and even Claude Makelele, who is on PSG's coaching staff, would now be considered.

The French champions are seeking a successor to Carlo Ancelotti, who is to take up the reins at Real Madrid along with his coaching staff, having steered the French club to their first league title in 19 years and the quarter-finals of the Champions League. Qatari Investment Authority had sounded out the likes of José Mourinho, Manuel Pellegrini and Guus Hiddink before targeting Villas-Boas, only for the Portuguese to become the latest high-profile candidate to opt to remain at his current club.

Prospective managers are apparently being unnerved by PSG's long-term interest in the Arsenal manager, Arsène Wenger, whom they still hope to hire at the end of his contract next summer. Al Khelaifi is also the general manager of al-Jazeera Sport, the Qatari-owned television station, employs Wenger as a pundit and enjoys a good relationship with the Frenchman.

Al Khelaifi attempted unsuccessfully to lure Wenger from Arsenal in the summer of 2011 and further soundings were taken towards the end of last season, with Wenger insistent that he respects his contracts. The Arsenal chief executive, Ivan Gazidis, has made clear this summer that he wants to secure his manager on a new long-term deal.